Nick Clegg should use the death of House of Lords reform as an opportunity to force the Tories to support a more "liberal" approach to the economy, according to a Lib Dem policy adviser.

David Hall-Matthews, the chair of influential Social Liberal Forum, says the deputy prime minister should use the parliamentary time freed up by the ditching of the Lord Reform Bill to begin changing the government's economic strategy.

"Now it is time to demand a Liberal approach to the economy: Keynesian stimulus, wealth taxes and more, not less, support for the most vulnerable," he writes on The Huffington Post today.

"Of course, his Tory cabinet colleagues won’t like it – but, frankly, they owe him. And pleasing them should never have been his main concern."

He added: "House of Lords reform is important - it attacks vested interest and over-concentration of power, as Liberals have always done. But it doesn't stir the blood in mid-recession. "